Data: AI could drive customers back into stores

Two-thirds of consumers said they would be encouraged to visit a bricks-and-mortar location “if they could check real-time product availability”, according to a survey by Retail Economics and law firm CMS. 

The report said that “at a time when footfall to shops is declining and many high streets are in decline”, properly implemented retail AI systems could “make shops more attractive destinations and help retailers compete more effectively with online rivals”.

It said AI technology could drive everything from targeted promotions to optimised store layouts and enhanced advert display placements.

As a result, 80% of retailers said they thought AI had “the potential to increase customer loyalty” to brands.

However, 59% of retail respondents said they “lack specialised skills” required to adopt such AI solutions in-house. Three-quarters of businesses surveyed said they would instead look to “procure services from an external technology supplier”. 

Almost two-thirds of retailers (63%) said AI would give rise to “significant opportunities to optimise supply chains”; 53% said it would lead to reduced costs; and 47% thought it would help create a more “meaningful relationship with customers”.

Disruption 2.0

According to the report, titled Disruption 2.0… here we go again, 66% of retailers pinpointed sales and marketing as a key area for AI investment. More than half of retailers surveyed (53%) said warehouses, distribution and logistics represented a key area of AI investment, while 47% said they were focusing on their buying and merchandising functions.   

Retail Economics chief executive Richard Lim said: “Technology is at the very heart of disruption in the retail industry, driving a period of unprecedented change. Seismic shifts within the consumer and retail industries are being exacerbated by AI integration at every step of the customer journey.

“Retailers are acutely aware of potential AI-derived cost savings, increased productivity and efficiencies. This is evidenced by 85% of retailers who think that AI-powered data analytics will enable more sophisticated targeting of customers.”

CMS partner Matthew Bennett said: “Perhaps having learnt the lesson of failing to adapt quickly to emerging internet technology the first time around, many retailers and brands have been early adopters of AI relative to other industries.

“This report collects the views of companies as well as consumers on both the current applications of AI in the sector as well as the next wave of disruption. Some fascinating themes arise, notably around trust and ethics, a generational divide among consumers, AI skills shortages within organisations, and significant legal and regulatory hurdles.”